ILLINOIS

POLLUTION CONTROL

BOARD

February 20,

1985

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

)

)

PCB

83’~83

)

JOSLYN MFG.

&

SUPPLY

CO.,

an

)

Illinois corporation,

and

HERMAN ZELDENRUST,

Uespondents.

ORDER OF THE BOATU

(by B.

Forcade):

This matter c~imes to

the Board on a July 11,

1983 complaint

filed by the Peop;U~of the

State of Illinois

(“Peop1e’~) against

Joslyn Mfg.

&

Supply Company

and Eerman~Zeldenrust

(“Joslyn~).

The three count coniplaint

claims violations of various

provisions

of the Illinois Environmental

Pr9tectton Act

(“Act’s)

and Board

regulations as a result

of emptying a drum of pure

liquid

polychlorinate~biphenyls

(‘~PCBs”)~

on.

about

June

25,

1981,

in the

Cook County Fo ~st

Preserves

After var

dUS

preliminary motions,, which were

disposed of by

Board Orders c

October

6.,

1983,

and November 18,

1983,

the

People

f31.ed e

Jaruary

9, 1985, a Stipulation and

Proposal

for

Settlement

(~Sett1einentAgreement”),

signed by both

parties.

At

a January 16,

1985 hearing

in

Chicago, counsel

summarized the

Settlement Agreement; however,

no witnesses were

presented and

rio

sworn testimony was received.

The

!ettlement

Agreement, after

the customary recitals that

it

is

null and void

unless the Board

accepts each and every term and

condition, contains

three

parts.

The first part contains

fourteen numbered

paragraphs

stating facts to which both

parties agree.

The

second part

contains contentions by the

People that the

previously described

facts constitute various violations

of the Act

and Board

regulations.

Joslyn Qj

to

the contentions of

violation,

The third part of the

Settlement

Agreement is the

proposal for settlement which

includes:

(1)

a

Board cease and

desist order,

(2) Joslyn will

make a “payment”

of $14,000

to the

Environmental ~ProtectionTrust Fund,

(3) Joslyn

will pay an

$8,000 civil penalty,

‘4)

payments

will be ~

only ~tc~

the

Board accepts the set

intent

and a pending

~

in

ti

~uit

Court of Cook County between

the parties is dismissed,

(5)

the

People will attempt to secure

dismissal with prejudice

of the

Circuit Court case and

(6)

another

recital that

the Settlement

Agreement

is null and void unless

accepted by this

Board.

Joslyn

agrees

to this third part of the

Settlement A9reement.

The above

filings,

all request

that the

stipulation be

63-55

---

2

accepted exac ~

~s originally

proposed,

thus

eliminating the

Board~smodifie~ ion of ~the

stipulation

to

include findings of

violation agai

Joslyn and a

certificate of

acceptance.

The Board has several

fundamental problems

with the

Settlement Agreement and,

therefore,

must

reject

it

in its

entirety.

First,

the Board

is unable

to make

any finding of

violation on the extremely limited

facts presented;

even

if such

a

finding were possible the

parties

have not

indicated whether

this

would constitute a material

alteration of

the Settlement

Agreement rendering it null and

void.

Second,

it

is beyond the

Board*s

statutory authority

to order civil penalties,

payments

in

the nature of

lur~tary

contribution,

and

cease

and desist

orders

in

ce of

a

finding of violation.

Third,

the

parties ha ~

to present

evidence of

factors

which the

Board must cc

under Section

33(c)

of the

Act.

And finally,

under paragra

~),

all

payments of

civil

penalty and

voluntary con

ion are

cortingent

upon

a

specific action

£

the Circuit C

f Cook County

which may or

may

not occur.

On the B0L

first conbern,

the complaint

claims

essentially thr

types of violation:

open

dumping

violations

special waste v

ationa,

and water

pollution

violations.

~Lc

Board

is unable

o find

violations

regarding open

dumping be~duse

the permit stn

us of the

Cook County Forest Preserve

is not

available.

T

Board is

unable to find special

waste violationFt

because

the m

~rial is

described as

“pure PCBs”

(Settlement

Agreement,

15~

Without

more information,

the

Board

is unable to

conclude

that

~ was generated as

a direct or

indirect

result of

the manufactu~

of a~roduct,

nor that it was

pollution

control

waste or hazarcous waste,

And

finally, the Board

is unable to

make any

findings regarding

water

pollution as

each of these

claims involve an element of harm

or

threat of

harm,

The record

before the B

il ailer ~on any

harmful aspects

of PCB5,

The

record

befo~

is that someone

dumped

approximately 5~

gallons of

quid on the ground.

Without

a statutory or

regulatory v

t

this action

hardly justifies

a Board order

to

pay $22,008

Under

tt

pecific penalties

for

injury to public

health and ~e~tuze cud the environment” are to be imposed.

Section 2(7).

~peci

ically,

the

Board

is

empowered to impose

“civil penaltie~i~enforcement cases

under

Section 33(b),

and

may

order

that n cb penalties are to be

paid

to the Trust Fund

under Section 4’~~ä’.However, no

like authority

is exten9~dfor

the

imposition ar~pa

ënt of

“contributipr~

Thus

15

til

$8,000 civil penaty

ght be

acceptable wi

~

tinthz

violation,

the $14,000 “payment”

is totally

unacceptable.

A

penalty

acts as a sanction

for environmentally detrimental

and

illegal behavior,

Payment of a

sum

not

denoted

as a penalty

in

essentially a ~voUintary

contribution”

and such

contributions

have no

place in a statutory

regulatory scheme such as

the

Environmental Protection Act.

To accept a

payment

which

is

entirely

‘~1

in settlement

of an enforcement

action would

63-56

---

3

be

tantamount

to

the Board’s ordering payment in

settlement of

a

nuisance suite,

Such a practice

would be

in

contraventiln of the

Act’s clear

intentions.

The Board~ssecond concern,

and the primary

basis

for

rejection of this stipulation,

is the Board’s

conclusion that

it

lacks statutory authority to accept settlements

requiring payment

of stipulated penalties, payment

of voluntary

contributions, and

cease and desist orders

without

a Board finding

of violation,

based either on admissions

or evidence contained

in the record,

The legis1atively~createdBoard derives its enforcement

powers

and duties from the Act and the

Administrative

Procedure Act

(“APA”), Ill. Rev, Stat.

ch,

127 §1001 et seq.

Section 33(a)

of

Title VIII:

~Enforcement” of the Act empowers and

requiris the

Baord, after hearing,

to “issue and enter such

final orde~

as

it shall deem appropriate

•..

(and

shall)

file and pubii~’~’T!a

written opinion stating the facts and

reasons lead~~~

~

decision.”

The

“written opinion” requiremunt o’~

Section 32(~

has a counterpart in Section 14 of the APA, requiring

in

contested cases

“findings of facts and conclusions

of law.”

Section 33(b) of the Act provides that “such

(Section 32(a)

order

may

include

a direction to cease and desist

from violations

of the Act or of

the Board’s rules and regulations

or of any

permit

or

term

or

c9ndition~thereof, and/or the

imposition

by the

Board of

civil

enalties

in accord with Section 42

of the

Act.***”

The

~.

rtinent subsection of the Section,

Section 42(a),

provides

that:

“Any

j

~rsonthat violates any provisions

of

this Act

or

any regulation adopted by

the

Board,

or

any permit or

term or condition,

therefore,

or that violates any

determination

or order of the Board

pursuant to this

Act,

shall

be liable to a

civil penalty of not

to

exceed

$10,000 for

said violation and an

additional civil penalty of

not to

exceed

$1,000

for each day during which violation

continues;

such

penalties may, upon

order of

the Board or

a court

of competent

jurisdiction, be made

payable to the

Environmental

Protection Trust Fund,

to

be

used

in accordance

with the provisions

of “An

Act creating the

Environmental Protection

Trust

Fund,’

epproved September

22,

1979,

as

amended,

The

Act ‘does

not specifically mention settlement

procedures.

However, pursuant to the authority

generated under

Section 26 of the Act,

the Board has adopted a

procedural rule,

35 Ill. Adm1

Code

103,180, permitting,

and

providing

requirements

for submittal of a proposed settlement

or

compromise.

A

writt~r

statement is to

be

filed containing,

among other

things,

a “fil~

stipulation

of all material

facts

pertaining to

the nature,

---

4

extent, and ec~ ~n3of the alleged violation,”

a proposed

compliance pla

and a proposed Penalty.

il

i~nq

with

~

hearing requirerents of Sections 31 and

32 ~

~

A

written proposal

is to be presented at public heariry for

en

comment on the alleged violations and

proposed

settlement

terms,

The Board has provided that

it shall

“consider

such

proposed settlement or stipulation

and the

hearing recor& and

may “accept, suggest revisions

in,

reject

the proposed settlement

or stipulation, ordirect further hearings as it appears

appropriate.”

Viewing the Settlement

Agreement

in light of

these various

statutory and

ilatory requirements,

it

is

clear

that the Board

cannot make ~

~quired findings of

fact and

conclusionc

of law

beyond one th

the parties wish to

settle the

case

for

$ 2~Q00

payable into

rust Fund,”

To the extent Fh~Ac~

the Board to

payment of a penalty,

ti~e

~tho~

s

premised on a

hug of violation.

As the S~ ‘~ementAgre~nnurt

resists such

ird finding, and as

the Act

does not authorizc

the Board to a

?t,

on the part of the

State,

“voluntary

contributions”

settlement of “nuisance suits,” the stipulation

must be rejects

The parties have not addressed the

Board’s

statutory

authority to a cept this

stipulation.

However,

the Board,

in

IEPA v, Chemet

, PCB 83~2,

February

2.,

1985,

addressed various

policy argunier

~~by the Attorney General

in

favor of accepting

that stipulat!

in the absense of

findings of

violation.

Since

the

Board pre~

es that the Attorney

General would

make

5’

~1ar

assertions her~, the Board will again

address

them here.

In

Chernetco, the Attoroey~general asserted that the law favor~

settlements and that a findiiig of

violation

destroys the essence

of the

bargain here and ~pxotracts litigation and that the Board

has

in a few can

‘niposecl fines without a finding of

violation.

rf’

t.

not articulated in Chemetco,

it might a±sobe

argued that

t

f~~t

of the Board~sdecision interferes with

the Attorney G°~te

a

‘~

otherwise broad powers of prosecutorial

discretion.

While

the

1 cy arguments might support a legis~ailve

change, they

z

c~ ter

to the Board~splain reading of

t e

ACt.

The Board

ecognizes that the courts have accepted

settlements between two partied without admissions.

The c urts,

however, have inherent common law powers that the Board does not

possess.

AdcLtro~

,,

the Act inherently recognizes tha

pollution issues

e interest of

ott~

~erson~

~zeand

beyond the part

Se~tion2 of

the Act

~es

c1,

Phe

Board suggests that the Act was

deliberately

framed

to require

the

Board to make findings of

violations,

so as

to assure that

compliance

and payment of a penalty

is a compulsory, not a

voluntary,

act.

Existence or

lack of findings

of violation may

also be

important in the event of

subsequent

filing of

enforcement

actions against the same

source:

previous findin~

of violatior

oroperly be

considered as

aggravating

---

5

circumstances affecting penalty

deliberations

in

later cases,

The Board also notes, pursuant to

Section

3’~, that com~. i~tcmay

be filed,

and settlements reached,

by citiz~

status of “private attorneys general,”

and

qu~sci~ons

wieth ~ wide

prosecutorial

discretioc also

accrues

to such persons

concerning

stipulated

penalties and

compliance

conditions.

The Board~s

third

concern regarding Section

33(c)

factors

is

self—evident.

The

last concern can be clearly stated:

What

happens

if

the

Circuit

Court does not order dismissal

with

prejudice?

Generally,

the

Board has

no

objection to

parties filing

stipulated

racts

~iithoutsettlement conditions,

with the Board,

The Board

encourages

such stipulations because

they redu

the

number of contested issues to be addressed

at

hearing.

On

an additional note,

while the

Board dh

~arages su~r~

action as

poor public policy in

environmental

matters,

the Board

cannot prevent the exercise of

litigant’s legal

rights

in a

contested case to negotiate

extra—judicial agreements,

contractual or otherwise,

followed

by a complainant~s

motion for

voluntary dismissal,*

In

such circumstances,

the

Board should

not be called upon,

and as a

practical matter, has no

power

to

review the propriety

or wisdom of such an agreement.

IEPAv.

Schlie, PCB 82

55

(December

6,

1984).

The diffi

~ty

arises

when the Board

is called

upon to

review and

act

~pon a settlement

agreement which

contains ~

determinative

~rder of

the Board,

In such circumstances,

the

Board must be provided with sufficient

information

to make a

ruling on

the merits of the case

(did a

violation

occur or not)

and sufficient

information to

determine that the remedy

is

appropriate to the violation,

In

five other cases today, the Board

has

addressed

the

problems of a determinative order resulting from a settlement

agreement where there

is no admission

of violation,

and

modification renders the agreement

null and void:

IEPA v.

Chemetco, PCB 83—2

($20,000 penalty, compliance plan and

schedule);

~

2lev.City

L~hicao,

PCB 81—190

($3,000 penalty,

$9,500 “voluntary contribution,”

stepped—up cross—connection

enforcement program); IEPAv.Arno1d’sSewer&~~y~ce

and

2~y.~cp2nald,PCB 83—23($300

“sum,”

“prohibition”

from

violations of the

.

~ffiPAv,Ci~of

Galva,

PCB

84—3,

84—4

(consolidated)

($

alty,complex

prog~.

of

sys’

improvements),

oh

these

cases the E~

~d has

_~

fied a

*The

Board nOtes that

certain governmental litigants

may

‘.

unable to

engage in contractual

agreements without specific

legislative

authorization,

---

6

question fo

Ler1~cutoryappeal.

Curhr

~onForInt~loc~orh

~J

This “finding of u~ioiation”

issue

is

before

the Board

today

in

six

cases, and potentially

has

applicability

to

every

enforcement

case brought

before

the

Board,

For

these

reasons,

as

well

as

the

fact that

a

contrary

result would

have ended

this

action,

the

Board

on

its

own

motion

hereby

issues

a

statement

(also

known

as

a

Certificate

of

Importance)

to

allow

for

immediate

interlocutory

appellate

review of the

Board~s

Order

pursuant to Supreme Court Rule

(“SCR”)

308.

SCR

308(a)

provides,

in pertinent rv~rtt

d.

court,

in

making an

in

order not otherwise appcal~le

fir

at

~ order

involves

~uestton o~

law

ch there

is substantial ground

for

3

of opinioi

and that an

imme

e

al from

the

order may materiallly

adva

th~

itisnate

termination

of

the

litig

ion,

the court

shall so state in

wnitir

,

identifying

the question of law

involvod~ the

appellate

Court may thereupon

in

it

discnetion

allow an appeal from the

order

The Board

s authority

to issue such a

statement

(see ~jj~y~

~y~!~cFu~

,PCB,

104 Ill.

Ap..

3d 285

(1st Dist,

1982,

pursuant

to 8CR 308,

the Board

finds that

this Order

a)

“involves a question of law as

to which there

is

substantial

ground for difference

of opinion,”

and

b)

immediate

appeal “may

materially advar’e the ultimate

termination

of

(this)

litigatior.

ior of law certified

for

appeal

is

as

follows:

Whe

~e

h

3 ard correctly determined that it

lacP~s

~t

o y authority,

pursuant to Ill.

Rev

‘+~

I

I

,

Section

1032,

1033

and

104

i.~

relate to Board acceptance of

sti

t

s of

fact and proposals for

settenn~n~.in enforcement cases,

to issue

Opinions and Orders

in which

any

Board

firBlr~,

1ation are

precluded by

the

terms of

‘

ulation

and propo~

but

i.

which

.

.

..~

n

is ordered

to ceaL~. ~nd

desist, pay a

stipulated

penalty,

and

make

a

voluntary contribution,

The Board hereby rejects the

Stipulation Agreement

and

orders that hearing

in this

matter

be scheduled

within

60

days

and

held

with

90 days.

In the

event

of an interlocutory

appe

the Board

wi.

~

~“n a motion

to

stay

its

order

that this

63-60

---

7

action go to hearing.

Should the parties determine

that

they

~.

to

f~

amended settlement aareement

containing

s~~fficient

ao~i~i

violation to support the remedy,

or

to

allow

the

Board

to modify

the agreement,

th3y may file within

35 days the

appropriate

pleadinns

IT IS

ORD~REL,

Board Membt~rJ. D. Dumelle

concurred.

I, Dorothy N0 Gunn, Clerk

of

the

Illinois

Pollution

C~trol

Board,

hereby cert~fythat the

above

Order was adQrtec~on

the

~?D~

day of

~

1~8t,~y a

of

~

/

Dorothy

M.

Gunn, Clerk

Illinois

Pollution

Control

Board